Monday, July 11, 2011

64% of Small Businesses Will Not Be Hiring This Year

This report illustrates the reason this is a jobless recovery. Most jobs in this country aren't created by GM or Citibank. They are created by small businesses. Small busines owners are very hesitant to hire anyone now. Here are the four main reasons.
  • Obamacare- Small business owners will soon be forced to purchase and keep insurance on themselves and their employees. They can't purchase a minimalistic plan. Obamacare mandates the type of plans that can be sold. Business owners will have to pay for many preventative services or pay a government penalty.
  • High energy costs- Gas and electric costs are up across the country. Gas prices really hurt many small business because they are service oriented and actually drive to the constomers house. Obama's anti-drilling and EPA CO2 regulating policies are exacerbating this increase and this trend will continue while Obama is in office.
  • Increased regulation- President Obama has launched an adventurous increase in regulation. Small business owners don't know how this will fully impact them, but they know it will be for the worse.
  • Taxes- President Obama and Democrats are committed to increasing taxes. A particular target is individuals making over $200,000 a year. Many small business owners fall in that bracket. They are faced with the possibility of receiving less reward for their financial risk if they expand their business.
The Wall Street Journal reported:

The U.S. labor market could stay sluggish for a while, with small-business executives reluctant to hire amid the murky economic outlook.

Almost two-thirds—64%—of small-business executives surveyed said they weren’t expecting to add to their payrolls in the next year and another 12% planned to cut jobs, according to a U.S. Chamber of Commerce report to be released Monday. Just 19% said they would expand their work forces.

This comes after a Labor Department report Friday showed employers added few jobs in June, and unemployment rose to 9.2%. The bleak figures joined other data showing the recovery losing momentum in recent months, which has caused many analysts and policy makers to lower their forecasts for economic growth in the second half of the year.

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